Python Extension fails to run scripts due to AppLocker + Native Locator + pet.exe spawn error after auto-update to v2025.10.1

[nilbest]

Type: Bug

Behaviour

After the Python extension auto-updated to v2025.10.1, running Python scripts via the ▶️ Run Python File button stopped working.
Nothing happens when clicking the button.

The extension logs (Python Environments) show:

[info] Starting Python Locator c:\Users\XXXXX\.vscode\extensions\ms-python.python-2025.10.1-win32-x64\python-env-tools\bin\pet.exe server  
[error] Error starting Python Finder ... A system error occurred (spawn UNKNOWN)

The extension also enters an infinite loop trying to locate virtual environments.

Changing the Python: Environment Locator setting from Native to JavaScript (js) did not resolve the issue in this version.

Steps to reproduce:

1. Use VS Code with Python extension v2025.10.1
2. Set the environment locator to Native
3. Try to run a Python script using the play button

Diagnostic data

Output for Python in the Output panel (View→Output, change the drop-down the upper-right of the Output panel to Python)

2025-07-23 13:55:34.152 [info] > pyenv which python
2025-07-23 13:55:34.152 [info] cwd: .
2025-07-23 13:55:34.174 [info] > conda info --json

Output for Python Environments in the Output panel (View→Output, change the drop-down the upper-right of the Output panel to Python Environments)

[info] Starting Python Locator c:\Users\XXXXX\.vscode\extensions\ms-python.python-2025.10.1-win32-x64\python-env-tools\bin\pet.exe server  
[error] Error starting Python Finder ... A system error occurred (spawn UNKNOWN)

📄 Context

This issue started after the Python extension auto-updated to v2025.10.1. From that point on, the extension appeared to enter an infinite loop trying to locate virtual environments.

Changing the python.experiments.optInto or python.experiments.enabled settings had no effect.
Also, switching the Python: Environment Locator setting from Native to JavaScript (js) did not resolve the issue in this version.

✅ Workaround

I was able to resolve the issue by:

1. Manually downgrading the Python extension to version v2025.10.0

2. Then switching the Environment Locator setting from Native to JavaScript (js)

After this, the play button worked again as expected and it fixed the infinite search loop.

Diagnostic data

Extension version: 2025.10.1
VS Code version: Code 1.102.1 (7adae6a56e34cb64d08899664b814cf620465925, 2025-07-15T16:41:17.147Z)
OS version: Windows_NT x64 10.0.26100
Modes:

• Python version (& distribution if applicable, e.g. Anaconda): 3.13.5
• Type of virtual environment used (e.g. conda, venv, virtualenv, etc.): Venv
• Value of the python.languageServer setting: Default

User Settings

languageServer: "Pylance"

Installed Extensions

Extension Name	Extension Id	Version
debugpy	ms-	2025.10.0
js-debug	ms-	1.102.0
js-debug-companion	ms-	1.1.3
jupyter	ms-	2025.6.0
jupyter-keymap	ms-	1.1.2
jupyter-renderers	ms-	1.3.0
python	ms-	2025.10.0
vscode-js-profile-table	ms-	1.0.10
vscode-jupyter-cell-tags	ms-	0.1.9
vscode-jupyter-slideshow	ms-	0.1.6
vscode-pylance	ms-	2025.6.2
vscode-python-envs	ms-	1.0.0

System Info

Item	Value
CPUs	13th Gen Intel(R) Core(TM) i5-1345U (12 x 2496)
GPU Status	2d_canvas: enabled canvas_oop_rasterization: enabled_on direct_rendering_display_compositor: disabled_off_ok gpu_compositing: enabled multiple_raster_threads: enabled_on opengl: enabled_on rasterization: enabled raw_draw: disabled_off_ok skia_graphite: disabled_off video_decode: enabled video_encode: enabled vulkan: disabled_off webgl: enabled webgl2: enabled webgpu: enabled webnn: disabled_off
Load (avg)	undefined
Memory (System)	15.69GB (5.06GB free)
Process Argv	C:\TechemTools\src\Battery_Project --crash-reporter-id fd5b8fa9-88a5-4ddc-85b3-81e4e9991702
Screen Reader	no
VM	0%

A/B Experiments

vsliv368cf:30146710
binariesv615:30325510
h48ei257:31000450
nativeloc1:31344060
dwcopilot:31170013
6074i472:31201624
dwoutputs:31242946
9064b325:31222308
copilot_t_ci:31333650
e5gg6876:31282496
pythoneinst12:31285622
c7cif404:31314491
pythonpulldiag:31343502
996jf627:31283433
pythonrdcb7:31342333
usemplatestapi:31297334
0aa6g176:31307128
747dc170:31275177
6518g693:31334701
aj953862:31281341
generatesymbolt:31295002
convertfstringf:31295003
9d2cg352:31346308
usemarketplace:31343026
nesew2to5:31336538
agentclaude:31350858
nes-diff-11:31337487
replacestringexc:31350595
nes-set-on:31351930
6abeh943:31336334
envsactivate1:31352070
yijiwantestdri0626-t:31336930
0927b901:31350571
ji9b5146:31348712
0cj2b977:31352657

[eleanorjboyd]

Hello! Can you see if adding python.useEnvironmentsExtension: false to your users settings fixes the problem without downgrading? This is likely related to our new extension we are bundling which you can read about in microsoft/vscode-python-environments#581

[eleanorjboyd]

To help debug further, can you try the following steps?

First, change the python.useEnvironmentsExtension setting is set to true.
(You'll also need to re-enable the Python Environments extension if it's currently disabled)

Once that's done, open the Command Palette and run:
Python: Run Python Environment Tool (PET) in Terminal
Let me know if this results in the same error you posted earlier.

[eleanorjboyd]

@DonJayamanne and @karthiknadig looping you in due to the PET error. Any thoughts on this: Error starting Python Finder ... A system error occurred (spawn UNKNOWN)

[nilbest]

To help debug further, can you try the following steps?

First, change the python.useEnvironmentsExtension setting is set to true.
(You'll also need to re-enable the Python Environments extension if it's currently disabled)

Once that's done, open the Command Palette and run:
Python: Run Python Environment Tool (PET) in Terminal
Let me know if this results in the same error you posted earlier.

I'm now on vacation, so I can try it again in a couple of weeks. I also checked it on my PC at home and there I did not get the same problem. So it may be a problem with some rights or antivirus software, used at my company that blocks it.
Since I read some older reports from other Users who had the same Problem I thought an Issue about that topic should be reopened because it seems to recur. Also, it was directly caused by the update. (I forgot to turn off auto update the week before, otherwise, the problem would not have occurred during my working time)

[MaKTaiL]

Hello! Can you see if adding python.useEnvironmentsExtension: false to your users settings fixes the problem without downgrading? This is likely related to our new extension we are bundling which you can read about in microsoft/vscode-python-environments#581

I had a different issue where trying to run a script always failed. Disabling this extension fixed it, so thank you.

[nilbest]

Hello! Can you see if adding python.useEnvironmentsExtension: false to your users settings fixes the problem without downgrading? This is likely related to our new extension we are bundling which you can read about in microsoft/vscode-python-environments#581

Hello! I tried adding "python.useEnvironmentsExtension": false to my user settings as suggested, but unfortunately it didn’t solve the issue without downgrading. I understand this might be related to the new extension you're bundling, as mentioned.
Here’s what I observed:

{
    "python.useEnvironmentsExtension": false  //or true
}

• When set to false, the infinite loop while searching for the virtual environment stops, but no environment is detected at all — not even the global Python installation.

• When set to true, I still get the same output as mentioned earlier when using version v2025.10.1.

I also ran the Python: Run Python Environment Tool (PET) from the Command Palette, and got the following responses:
Terminal:

PS C:\XXXXXXTools\src\Battery_Project> "c:\Users\XXXXXX\.vscode\extensions\ms-python.vscode-python-envs-1.2.0-win32-x64\python-env-tools\bin\pet.exe"
c:\Users\XXXXXXX\.vscode\extensions\ms-python.vscode-python-envs-1.2.0-win32-x64\python-env-tools\bin\pet.exe

Output Python Environments:

2025-08-06 09:36:33.569 [info] Starting Python Locator c:\Users\XXXXXXX\.vscode\extensions\ms-python.vscode-python-envs-1.2.0-win32-x64\python-env-tools\bin\pet.exe server
2025-08-06 09:36:33.570 [error] Error starting Python Finder c:\Users\XXXXXXXXX\.vscode\extensions\ms-python.vscode-python-envs-1.2.0-win32-x64\python-env-tools\bin\pet.exe server A system error occurred (spawn UNKNOWN)
2025-08-06 09:37:08.028 [info] Running PET in terminal: c:\Users\XXXXXXXXXXX\.vscode\extensions\ms-python.vscode-python-envs-1.2.0-win32-x64\python-env-tools\bin\pet.exe

Output Python:

2025-08-06 09:36:33.566 [info] > pyenv which python
2025-08-06 09:36:33.566 [info] cwd: .
2025-08-06 09:36:37.419 [info] > conda info --json
2025-08-06 09:41:43.429 [info] Discover tests for workspace name: Battery_Project - uri: c:\XXXXXXTools\src\Battery_Project\test.py

Hope that helps! For now, I’ll stick to my work around: downgrading to v2025.10.0 and setting the locator to js:

{
    "python.useEnvironmentsExtension": true,
    "python.locator": "js"
}

Also then i downgrade and the env works the Output Python shows:

2025-08-06 09:56:33.912 [warning] Dir "c:\XXXXXXXXTools\src\Battery_Project\.pixi\envs" is not watchable (directory does not exist)
2025-08-06 09:56:33.912 [info] Python interpreter path: .\env\Scripts\python.exe
2025-08-06 09:56:33.923 [info] > pyenv which python
2025-08-06 09:56:33.923 [info] cwd: .
2025-08-06 09:56:35.354 [info] Starting Pylance language server.

[eleanorjboyd]

@DonJayamanne or @karthiknadig ideas on this error from PET:

2025-08-06 09:36:33.570 [error] Error starting Python Finder c:\Users\XXXXXXXXX.vscode\extensions\ms-python.vscode-python-envs-1.2.0-win32-x64\python-env-tools\bin\pet.exe server A system error occurred (spawn UNKNOWN)

[DonJayamanne]

Is it possible to look into configuring the AppLocker from preventing the PET executable to launch.
Given this is related to AppLocker, its an environment (user) issue thats causing the PET exe from launching.